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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  SoftBank Corp.    9434   JP3732000009

SOFTBANK CORP.

(9434)
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SoftBank Group's market cap dips below domestic telco as scepticism grows

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03/18/2020 | 12:43am EDT
The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo

SoftBank Group Corp shares fell as much as 11.6% on Wednesday, with its market capitalization dipping below the value of its domestic telco, as uncertainty grows over its management of a portfolio of unproven startups.

The tech conglomerate's market cap fell to a low of 6.84 trillion yen ($64 billion), below SoftBank Corp's 7.1 trillion yen, reflecting the depth of investor scepticism over Chief Executive Masayoshi Son's assertions his tech bets are back on track and as the coronavirus outbreak roils markets.

Concern was exacerbated with sources telling Reuters that SoftBank is considering pulling out of a $3 billion bid to buy additional shares in its biggest soured bet, office-sharing firm WeWork, in what would be a major U-turn after it was forced to bail out the startup.

Last week, SoftBank announced a $4.8 billion share buyback amid fragile markets, a move S&P Global Ratings said "raises questions over its commitment to financial management" and prompted a revision in its outlook for the company to negative.

"We believe SoftBank's aggressiveness in pursuing growth and managing its finances makes its financial standing weak," S&P said.

Unlike peers such as Toyota Motor Corp and Uniqlo parent Fast Retailing Co, SoftBank's Son has spent much of his cash pile investing in overseas startups, many of which analysts believe are exposed to a looming slowdown.

"We think no other company in Japan is as indebted and as exposed to the economic downturn as SoftBank," Amir Anvarzadeh, market strategist at Asymmetric Advisors, wrote in a note.

SoftBank last month said it would pledge shares in its domestic telco as collateral to raise up to $4.5 billion, reflecting its falling back on established portfolio businesses for cash as its $100 billion Vision Fund struggles to raise capital for a successor fund.

"For the next few months, cash is going to be the single most important factor as only cash will allow affected businesses to survive the very sharp (but temporary) decline in their revenues," tech analyst Richard Windsor wrote in a note.

By Sam Nussey

Stocks mentioned in the article
ChangeLast1st jan.
FAST RETAILING CO., LTD. 1.14% 46950 End-of-day quote.0.30%
SOFTBANK CORP. -0.58% 1380 End-of-day quote.0.11%
TOYOTA MOTOR CORPORATION -1.08% 6680 End-of-day quote.-0.58%
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Financials (JPY)
Sales 2020 4 872 B
EBIT 2020 911 B
Net income 2020 502 B
Debt 2020 3 865 B
Yield 2020 6,30%
P/E ratio 2020 13,1x
P/E ratio 2021 12,5x
EV / Sales2020 2,14x
EV / Sales2021 1,94x
Capitalization 6 543 B
Chart SOFTBANK CORP.
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Technical analysis trends SOFTBANK CORP.
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 1 618,57  JPY
Last Close Price 1 380,00  JPY
Spread / Highest target 43,1%
Spread / Average Target 17,3%
Spread / Lowest Target -7,25%
EPS Revisions
Managers
NameTitle
Ken Miyauchi Executive President, CEO & Representative Director
Masayoshi Son Chairman
Yasuyuki Imai Co-COO, Representative Director & Executive VP
Jun Shimba Co-COO, Representative Director & Executive VP
Kazuhiko Fujihara Chief Financial Officer & Director
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